Corporate Sustainability Reporting Directive (CSRD)
What does the regulation cover?
The Corporate Sustainability Reporting Directive (CSRD) builds on the Non-Financial Reporting Directive (NFRD). It specifies which companies are obligated to report on sustainability as well as the form these reports should take. In addition to the directive itself, the European Sustainability Reporting Standards (ESRS) also set out detailed specifications stipulating the report content. Companies that will in future have to prepare sustainability reports on the basis of the CSRD will disclose information as per the ESRS.
Who does the regulation apply to?
The existing reporting obligation is now extended to...
... all large firms. Companies are considered large if they meet at least two of the following three criteria for the reporting period:
- Balance sheet total: at least €25 million
- Net turnover: at least €50 million
- Average staff headcount for the financial year: at least 250
... all companies listed on the stock exchange, small and non-complex credit institutions and captive (re)insurance undertakings. The exception here is micro firms, which are defined as companies that meet at least two of the following three criteria for the reporting period:
- Balance sheet total: max. €450,000
- Net turnover: max. €900,000
- Average staff headcount for the financial year: max. 10
Please note: On 17 October 2023, the European Commission published a delegated directive to amend the size criteria for small and medium-sized enterprises (SMEs) set out in Directive 2013/34/EU. Because the CSRD refers to this directive in defining the scope of application (see Art. 5 para. 2), this adjustment to the thresholds also has a direct impact on the scope of application of the CSRD.
When do these obligations come into force?
The CSRD came into force at EU level on 5 January 2023. The directive must be transposed into national law in Germany and all other EU member states within the following 18 months.
The current timeline stipulates that companies required to report under the CSRD are to do so in a tiered system according to their size using the ESRS. Companies that are currently required to report under the German CSR Directive Implementation Act (CSR-RUG) will report for the first time in 2025 on the 2024 reporting year, with other companies to follow. For further details, please see our factsheet (in German).
Additional background information
Uniform reporting standard: European Sustainability Reporting Standards (ESRS)
Moving forward, company reports will disclose sustainability information using uniform EU reporting standards. As such, the European Financial Reporting Advisory Group (EFRAG) has, as a first step, developed cross-sector standards (Set 1) on behalf of the EU Commission. These were submitted to the EU Commission in late November 2022, with the Commission publishing the delegated act on Set 1 of the ESRS on 31 July 2023.
Please see the EU Commission’s website for the final cross-sector European Sustainability Reporting Standards (ESRS). The following Q&A from the EU Commission answers all key questions about the ESRS.
EFRAG implementation guidance
EFRAG finalised and published its first implementation guidance (IG) on 31 May 2024, along with an Excel list containing all data points of the cross-sector ESRS.
- Materiality assessment guidance
- Value chain guidance
- Excel list with ESRS data points and associated explanatory note
EFRAG intends these documents to support companies and other stakeholders in implementing the ESRS and help them focus on individually relevant aspects of the standards. The guidance reflects public feedback, having been subject to public review between December 2023 and February 2024.
EU reporting standards for SMEs
EFRAG is also in the process of developing its own standards for small and medium-sized enterprises (SMEs): first, for listed SMEs subject to reporting requirements, or ESRS LSME, and second for SMEs that wish to report on a voluntary basis, or VSME. EFRAG published drafts for both SME standards on 22 January 2024 and launched the public consultation. Both drafts are open for review for their real-world applicability until 21 May 2024, with comments invited via two separate online surveys.
Please see here for further information on the consultation for the SME standards.
Sector-specific EU reporting standards
EFRAG is also developing sector-specific EU reporting standards for mid-2026. These sector-specific standards will include any impacts, risks and opportunities that are likely to play a material role for all companies in a given economic sector that are not (sufficiently) covered by the topic-based standards. You can read more about the sector-specific standards here.
EU reporting standard for non-EU companies
The CSRD will not only affect companies from within the EU, but also companies from non-EU countries. EFRAG will also develop its own reporting standard for these companies by mid-2026.
Further links
The following links offer further support.